Introduction

It is an established fact that self-employed individuals are, on average, more satisfied with their jobs than paid employees (see, e.g., Bianchi, 2012; Blanchflower, 2000; Blanchflower & Oswald, 1998). Bianchi (2012) suggests that non-pecuniary dimensions of job satisfaction, especially independence, have an impact on utility differences between both groups. Procedural utility theory (Benz & Frey, 2004, 2008) is closely connected with these findings because it describes that individuals do not derive satisfaction purely by outcomes, but also by the way outcomes are achieved.

Most of the literature about procedural utility relies on differences in job satisfaction between paid employees and the self-employed. In their international analysis, Benz and Frey (2004) focus on the effects of autonomy, which completely describes differences in satisfaction with the job between paid employees and self-employed individuals in Western and Eastern Europe as well as in North America. Being subject to hierarchical decision-making as inverse measure of independence is the main predictor of procedural utility in Benz and Frey (2008). In both papers, the results advert to the importance of procedural utility. Fuchs-Schündeln (2009) adverts to heterogeneity in procedural utility among different types of individuals. The author also concludes that economists still are in a very early stage of analyzing the importance of procedural utility theory. Block and Koellinger (2009) differ from the above mentioned analyses in that the authors refer to entrepreneurs instead of self-employed individuals. Precisely, the authors examine the importance of creativity and independence in satisfaction with the start-up and find that “entrepreneurship can be an attractive career opportunity for individuals who strongly value independence and creativity” (Block & Koellinger, 2009 p.205).

This paper aims to deliver new evidence about procedural utility by application of round 5 of the European Social Survey (ESS). We utilize data collected in the year 2010 which include a large number of observations. Our data consist of 14,879 employees and 1,984 self-employed individuals aged between 18 and 65 in 25 European countries. The questionnaire includes information on satisfaction in the main job and asks individuals about the subjective evaluation of the importance of autonomy as well as creativity which are dimensions of procedural utility theory. With respect to previous literature describing procedural utility (Benz & Frey, 2004; Block & Koellinger, 2009) a major difference is the calculation of an indicator which combines both aspects rather than purely using creativity or autonomy as predictors. This variable is expected to describe utility obtained from the way outcomes are achieved – i.e. procedural utility – more precisely than pure application of autonomy or creativity. A further enhancement to Schneck (2012) is the examination of single countries to conclude about heterogeneity across countries.